Thursday, October 24, 2013

Pareto and petit bourgeois nietzschianism

“His belief in man's freedom of thought and action, whether in the
marketplace, in the press or in the university lecture halls remained
unshaken till the end of his life. His economic liberalism was similar
to that of the classical school; he upheld the freedom of markets,
defended the merits of a free competitive system and was responsible
more than any other economist for turning economics into a positive
science, devoid of ethical considerations.”

Such is the summing
up of Pareto’s work by one of his modern admirers, Renato Cirillo. The
last phrase, with its combination of the petit bourgeois and Nietzschian
grandiosity, is meant seriously. But of course it is nonsense: you do
not uphold the ‘freedom of the markets”, or think that “freedom” even
has a meaning in relation to ‘markets’, unless you are jammed full of
ethical considerations, unless they dictate your whole view of the
social hierarchy.

Pareto optimization, or “efficiency”, has been
enfolded in the neo-classical tradition as something like a law of
economics – or at least that branch which deals with ‘welfare”. Now it
may seem that efficiency has little to do with needs and satisfactions
except as, at best, a measure of the number of steps involved in
performing an action. But efficiency has been elevated from humble
origins far above the other conceptual gods by the economists, who have
found in it a mantra to defend every kind of inequality and turn the
tables on the carpers. The classical formulation of the Pareto axiom is
this, from Alan Peacock and Charles Rowley: “if any change in the
allocation of resources increases the social welfare of at least one
person without reducing the social welfare of any other person, then
this change should be treats as improving total social welfare.”

It
is a dog’s body of a formula, but of course one can see at a glance
that – skipping lightly over the exploitation of labor, which we will
now pretend never happens and has nothing to do with value – from a
neo-classical point of view, this is nearly heaven. To justify the
enormous fortunes of the wealthy on the grounds that they somehow earned
it runs into the absurdity of ‘earning’ millions for sitting at a desk
and making decisions, or for having come up with a nifty device once
upon a time in one’s youth, etc. Far better, then, to derail the whole
critique by boldly claiming that the rich not only harm no one, but
improve the total social welfare every time the dividend check comes in
the mail.

Pareto’s own formulation of this maxim is heavily
mathematical, which is, of course, another strike in its favor.
Mathematizing relations is a very handy way of avoiding the conceptual
analysis of same.

Otherwise, of course, this oracular
pronouncement seems unlike to help us understand almost any real
situation of “allocating” resources. Let’s go for the first and most
obvious problem, which is the presumption that the social welfare is
defined in terms of positive gains. As anybody knows, though, this is
simply not a general rule for life. In fact, it is often the worst rule
to follow. If the allocator of ice cream at the party allocates me a
bowl and my friend, Mr. Cardiac Arrest, a bowl, his social welfare would
be improved if I stole his bowl of ice cream. Such situations of
limits and overindulgence, writ large and small, are all over our
“social welfare”.

Which, of course, gets us to questions of the
allocator. The allocator is a strange beast, having no self interest of
its own, but begin able to read exactly what the self-interest of all
individuals in the collective are. Even the neo-classicals back away
from this idea – which is why they prepose the much more wooly idea that
interest and aggrandizement of goods is the same. Of course, this
shreds into little synchronic strobe lit bits the true temporal
dimension of the social. That x get wealthy and I don’t may, at time 1,
seem to be no skin off my nose – but it is one of the funny things
about wealth that you acquire it to acquire power. Wealth is as much a
part of a position vis a vis others as it a quantity of purchasing
power. This means that there exists a distinct possibility that, at some
time in the future, the wealthy man will use his wealth to raise the
bar to entry for the non-wealthy man.

How, of course, is our
magic allocator to know this? The neo-classical solution, of course, is
to pretend that this allocator is dumb to such things, and make a virtue
of that dumbness. It is dumb because the future is uncertain! This
distributor of cards, this dealer behind the curtain, turns out to be,
of course, the market. The, as they like to say, “free market”. And
furthermore, we are to believe that this free market is exquisitely
sensitive to our needs and wants. Like a tongue tied beau, it woos us
with poetry. The market’s poetry happens to be prices.

Even
granted that something like “a market” can be extracted from the
thousands of real markets in existence in this world – which, I confess,
I doubt – the idea that the market is extremely smart and extremely
dumb at the same time is curious. In fact, as one of Pareto’s
commentators sheepishly admits, Pareto just assumed Say’s law – that
markets always clear. Say’s law is the black sheep of neo-classical
economics – it dare not speak its name, but – of course – it is believed
with the ardor of true love among their ranks.

Wednesday, October 23, 2013

Prufock, contemplating old age, asked “do I dare to eat a
peach.” Myself, near that same dire portal, am asking myself “do I dare to read
Peter Baker’s massive fluffing of the Bushies?” I think the medically sound
answer should be no. Any reporter who proves that Bush was not bossed around by
his VP by quoting Bush’s and Cheney’s friends –well, that reporter should go
quail hunting with the monster formerly known as the Vice President. What did
Baker expect? Interview the friends of Vlad the Impaler and I’m sure you’d get
a picture of a man who saved the lifes of small birdies who had tumbled from
the nest. Especially if they know Vlad can still fuck with them.

But it was ever thus with Peter Baker. No, he did not reach
the heights of ludicrousness ascended by certain of Bush’s flatterers – oh who
can forget – or who wants to remember – Fred Barnes Rebel in Chief, a book
where asslicking and orgasm tinge the pages (and will probably transmit a
sexual disease to you if you turn them – beware!). But Baker was no slouch in
the sycophant department. On my blog, I have a post from september, 2008, in
the midst of an unexpected meltdown that seemed to be happening under the reign
of the bestest guy you’d ever want to chop brush with. Baker, at that point,
began to sing of the true heros of the day: Paulson and Bernanke

It is nice to
see that some of the bigfoots –GreiderandKrugman, and
even the Bushite pinhead,Sebastian Mallabyin the WAPO – are coming out of the shrubbery to
denounce the Treasury department’s theft in the offing. The NYT, in contrast,
has set Peter Baker to the task of licking up a monument of bubble gum and
marble for those two superheroes of this Bushian time, Paulson and Bernanke.
Baker is the man for the task: on the Washington Post, he strove mightily to
apologize for mass murder and torture, covering President Backbone with the
same objectivity that might be expected from one of Nero’s catamites, reviewing
Nero’s acting abilities in the Coliseum. Hisdescription of the brain (Bernanke) and the man of
action (Paulson)is
like a Damien Hirst piece, if Hirst took to carving Pierrots out of his own
shit: it is kitsch cast in excrement:“The
two men have been working early and working late, tracking Asian markets and fielding
calls from their European counterparts, then reconnecting with each other by
phone eight or nine times a day, talking so often that they speak in shorthand.
Mr. Paulson has powered through the long days with a steady infusion of Diet
Coke. Asked twice to testify by the Senate last week, he begged off.“He
told me he had like four hours of sleep,” said Senator Christopher J. Dodd,
Democrat of Connecticut and chairman of the Banking Committee. But there were
limits to Mr. Dodd’s sympathy. “The public wants to know what’s going on,” he
said he replied.Mr.
Bernanke (his drink: Diet Dr Pepper) has made a point of leaving the office by
midnight to get at least some rest, but friends say the toll on him is clear as
well. Alan S. Blinder, a longtime friend and former vice chairman of the
Federal Reserve, recalled seeing Mr. Bernanke at a conference last month in
Jackson Hole, Wyo. “He looked like he had the weight of the world on his
shoulders,” Mr. Blinder said.And
that was before last week.”Baker,
whose effusions about the heroic, surge-right Bush in the NYT Magazine a couple
of weeks ago did had a dramatic effect on LI (we wanted to vomit after the
first couple of paragraphs) is in the fortunate position of the right sycophant
at the right moment, and one can feel him wiggling with excitement. And he has
that eye, doesn’t he: diet Dr. Pepper. Don’t you feel his maternal, servile
ache as he longs to perhaps bring one of his action heros, a true Batmen out to
free Gotham from its bad debts, another can. He understands, as does the NYT,
that this huge crisis in the Bandit class can only be assuaged by an obsessive,
massive theft that will make our successful and oh so smart masters feel, well,
masculine again; one that will exist like a burning yearning brand on the hides
of Americanus bovus, all of us lower downs: bought and sold at undermarket
prices. But of course, we out here in the fields, we cant understands theft! So
hard! Maybe the smarter peoples will figure it all out for us! Then we votes
for them!Of
course, in the UK, the New Labourites have already figured this out and have
translated it into the ineffable language of toadeating. This is one of the
Blairites, explaining, oh so delicately, that we can’t, just can’t, return to
cutting into the hides of the wealthy,who are generating our prosperity at a fearful rate.
Such genius brains!“But
is an economy which promotes minority wealth and privilege and requires the
state to tax the beneficiaries to support those it excludes really the only
alternative to the current order? An agenda based on the redistribution of
wealth rather than the redistribution of opportunity can only ever deliver
justice as compensation; mitigating the worst effects once the damage is done.
It is morally unambitious and likely to fail in the long run because by taxing
the beneficiaries more heavily, the wealth-generating capacity of an already
underemployed economy is further compromised.”Oh my!
Such butter and shit on the tongue, lodged firmly in the City asshole! We have
to (sob) redistribute opportunity! We need Blair, with all his evangelical
fervor, that wondrous Uriah Heep persona, to intone things like this, so that
the press guys in the pew can say Amen, and explain it to the plebes.

Monday, October 21, 2013

Adam is one year old today. A year! And yet, it is, on some days, hard to imagine we were ever without Adam - the laughter in the morning, the falling asleep to either ocean waves or cricket sounds via YouTube, the unpredictable enthusiasms for the stuffed gorilla, the slow, concentrated way he will at first point and then press his finger on a button, a piece of lint, some presque rien that, for reasons I'll never know, has come into his consciousness for a moment and reigns there, like the full moon lights up a dark night. What is rarely said - because we have to hide this behind complaints, otherwise the world would fill up with babies - is how enjoyable a baby is. Nobody wraps their arms around your neck with such utter, trusting abandonment like a baby - or makes such marvelous burbles, or makes ordinary things - standing, rolling, looking out the window - seem so never done before. Ah, our lulu!

About Me

MANY YEARS LATER as he faced the firing squad, Roger Gathman was to remember that distant afternoon when his father took him to discover
ice. Or rather, to discover the profit making potential of selling bags of ice to picnicking Atlantans, the most glorious of the old man's Get Rich schemes, the one that devoured the most energy, the one that seemed so rational for a time, the one that, like all the others - the farm, the housebuilding business, the plastic sign business, chimney cleaning, well drilling, candy machine renting - was drawn by an inexorable black hole that opened up between skill and lack of business sense, imagination and macro-economics, to blow a huge hole in the family savings account. But before discovering the ice machine at 12, Roger had discovered many other things - for instance, he had a distinct memory of learning how to tie his shoes. It was in the big colonial, a house in the Syracuse metro area that had been built to sell and that stubbornly wouldn't - hence, the family had moved into it. He remembered bending over the shoes, he remembered that clumsy feeling in his hands - clumsiness, for the first time, had a habitation, it was made up of this obscure machine, the shoe, and it presaged a lifetime of struggle with machine after machine.